Nursing home care in the United States costs a median of $305 per day for a semi-private room and $350 for a private room, which works out to roughly $9,150 to $10,650 per month. Most families pay through some combination of personal savings, Medicaid, Medicare (for short stays), veterans benefits, and insurance products. Understanding how each source works, and its limits, is the key to building a realistic plan.
What Medicare Actually Covers
Medicare is not designed to pay for long-term nursing home stays. It covers skilled nursing facility care for up to 100 days per benefit period, and only after a qualifying hospital stay of at least three days. The first 20 days are fully covered. From day 21 through day 100, you pay a daily co-payment of $217 (in 2026). After day 100, Medicare pays nothing.
This benefit exists for rehabilitation and recovery, not for ongoing custodial care. If you need help with bathing, dressing, and eating but don’t require skilled nursing or therapy, Medicare won’t cover the stay at all. Most people who move into a nursing home permanently need a different funding source within a few months.
Medicaid: The Largest Payer for Long-Term Care
Medicaid is the single biggest funder of nursing home care in the country, covering residents who have limited income and very few countable assets. Eligibility rules vary by state, but the thresholds are strict. In many states, an individual can have no more than $2,000 in countable assets. Some states set the limit slightly higher, at $2,400 for certain eligibility categories.
Your primary home is generally exempt from the asset count, as long as you intend to return or your spouse still lives there. However, states impose a home equity limit. In Kansas, for example, the cap is $752,000 in 2026. If your equity exceeds your state’s limit and no spouse or dependent lives in the home, it becomes a countable asset.
Qualifying for Medicaid often means spending down savings on care costs until you reach the asset threshold. This is where planning ahead matters. Many families work with an elder law attorney to structure finances legally before a nursing home admission, since transferring assets to family members within five years of applying (the “look-back period” in most states) can trigger a penalty period during which Medicaid won’t pay.
Protections for a Spouse at Home
If one spouse enters a nursing home and the other remains in the community, federal law prevents the at-home spouse from being completely impoverished. The Community Spouse Resource Allowance lets the non-institutionalized spouse keep up to $135,648 in assets (as of 2025). The at-home spouse also retains a minimum monthly income allowance so they can continue covering household expenses. These protections mean you don’t have to drain every joint account before the nursing home spouse qualifies for Medicaid.
Veterans Benefits
Veterans who receive a VA pension may qualify for an additional Aid and Attendance benefit if they need help with daily activities like bathing, feeding, or dressing. You can also qualify if you’re bedridden for a large portion of the day due to illness, if you’re in a nursing home because of a service-connected or other qualifying disability, or if your eyesight is severely limited. The benefit provides a monthly supplement on top of the standard pension that can be put toward nursing home costs.
Aid and Attendance won’t cover the full cost of a nursing home on its own, but it can significantly offset expenses. If you’re a veteran or the surviving spouse of a veteran, it’s worth checking eligibility early. The application requires a medical assessment and, if you’re already in a facility, a completed VA Form 21-0779.
Long-Term Care Insurance
Traditional long-term care insurance policies pay a daily or monthly benefit when you can no longer perform a set number of daily activities independently (usually two out of six, such as bathing, dressing, or eating). If you already have a policy, check your benefit amount, elimination period (the waiting period before payments begin), and whether it adjusts for inflation. Policies purchased decades ago sometimes have daily benefit caps that fall well short of today’s costs.
If you don’t already have a policy, buying one after age 65 or with existing health conditions can be expensive or impossible. Hybrid policies, which combine life insurance with long-term care coverage, have become increasingly popular as an alternative. These products pay out a long-term care benefit if you need it. If you never need care, they pay a death benefit to your beneficiaries instead. The appeal is that your premiums aren’t “wasted” if you stay healthy, which was a common complaint with traditional standalone policies.
Using Life Insurance You Already Have
If you hold a life insurance policy and need cash for nursing home care, you have several options beyond simply surrendering it for its cash value.
- Accelerated death benefits. Some life insurance policies include a provision that lets you draw on the death benefit while still alive. For policies that cover long-term care, the monthly nursing home benefit is typically 2% of the policy’s face value. A $200,000 policy, for instance, would provide roughly $4,000 per month. Whatever you collect is subtracted from the death benefit your heirs eventually receive.
- Life settlements. You sell your policy to a third party for a lump sum, generally available to women 74 and older and men 70 and older. You receive less than the full death benefit but more than the cash surrender value, and you can use the proceeds for any purpose, including nursing home bills.
- Viatical settlements. Similar to a life settlement, but available only if you are terminally ill. A viatical company pays you a percentage of your death benefit based on life expectancy. Guidelines from the National Association of Insurance Commissioners suggest payouts ranging from 80% of the death benefit if life expectancy is under six months, down to 50% if life expectancy exceeds 24 months.
Each of these options reduces or eliminates the inheritance your beneficiaries would receive, so they involve a real tradeoff. But for someone facing years of care costs, converting an unused policy into immediate funds can be a practical choice.
Paying Out of Pocket
At roughly $110,000 to $128,000 per year for a semi-private or private room, self-funding a nursing home stay is realistic only for people with substantial savings, retirement income, or both. The average nursing home stay lasts about two and a half years, though some residents need care for much longer. Even families who plan to pay privately often transition to Medicaid once savings are depleted.
Common sources of personal funds include retirement accounts, investment portfolios, home equity (through sale of the home or a reverse mortgage), and income from pensions or Social Security. If you’re paying out of pocket initially but expect to need Medicaid eventually, careful planning during the spend-down phase can protect some assets for a spouse or heirs within the rules your state allows.
Putting a Payment Plan Together
Most families don’t rely on a single funding source. A realistic plan might look like this: Medicare covers the first weeks after a hospitalization, personal savings and retirement income cover the next stretch, and Medicaid takes over once assets are spent down. Veterans benefits or long-term care insurance layer on top wherever they apply.
The earlier you start planning, the more options you have. Purchasing long-term care or hybrid insurance in your 50s costs a fraction of what it does at 65. Restructuring assets five or more years before you might need care keeps you safely outside Medicaid’s look-back window. And understanding your state’s specific Medicaid rules, which vary significantly, can mean the difference between protecting a home and losing it. An elder law attorney or Medicaid planning specialist can help you navigate the specifics for your situation and your state’s requirements.